CPS Technologies Corporation Announces Third Quarter 2020 Results
October 28 2020 - 4:45PM
CPS Technologies Corporation (NASDAQ: CPSH) today announced
revenues of $4.5 million and an operating profit of $253 thousand
for the quarter ended September 26, 2020. This compares with
revenues of $4.4 million and an operating loss of $479 thousand for
the quarter ended September 28, 2019.
For the nine months ending September 26, 2020,
revenues are $16.7 million with an operating profit of $1.2
million. This compares with revenue of $16.0 million and an
operating loss of $966 thousand for the nine months ended September
28, 2019.
Grant Bennett, President and CEO, said: “While
generally pleased with our bottom lines for quarter and nine-month
periods just ended, in the third quarter our top line was
increasingly negatively affected by the coronavirus pandemic. In
particular, our two largest customers are experiencing reduced
demand from their customers, resulting in a significant reduction
in purchases from CPS. Additionally, one of our suppliers
experienced a fire in May which shut down their operations for
almost the entire third quarter; they did not reopen until the
final week of September. This had the effect of pushing expected
third quarter shipments into the fourth quarter.
Gross margins and operating profits were
considerably higher in the three-month and nine-month periods just
ended than they were in the corresponding periods a year ago. This
significant positive swing in performance reflects the pricing,
product mix and operational improvements discussed in previous
quarters. This is clearly seen by the $100 thousand increase in
revenues resulting in a $732 thousand improvement in operating
profit and $700 thousand increase in revenues resulting in a $2.2
million improvement in operating profit for the three and nine
month periods ending September 26, 2020, respectively.
CPS continues to be open and operating during the
pandemic. To date most of our customers remain open and
operational. In Q3 we saw significant increased volatility on the
part of some of our customers, while for others it has been
business as usual. We expect that this volatility will continue for
at least the next several quarters.
As previously stated, CPS continues to follow CDC
and OSHA guidance in our workplace. Employees’ temperatures are
taken at the beginning of each shift, shifts have been staggered to
reduce employee overlap, workstations have been rearranged to
ensure social distancing, all employees are using facemasks,
etc.
Any forward-looking comments must begin with the
clear caveat that the pandemic is injecting considerable
uncertainty at customers and suppliers so conditions can and may
change quickly. While we must tone down our optimism for the fourth
quarter of 2020 and the first quarter of 2021, we continue to be
very optimistic about the future. We have several new projects
which could add materially to our revenue stream in 2021 including
in the hermetic package and armor product lines, in addition to our
core AlSiC component product line. The pipeline of new design wins
remains very robust. Recent in-depth analyses of pricing and costs
have enabled us to generate operating efficiencies which should
help us to grow hermetic package profitability in the coming
quarters and years. Armor is an area that has been on the table for
several years. Recent developments suggest this product may start
to generate material revenues as soon as next year.”
The Company will be hosting its third quarter
conference call with investors at 4:45pm on Wednesday, October 28.
Those interested in participating in the conference call should
dial:
Call in Number: 1-833-953-1394
Conference ID: 6798808
About CPS CPS Technologies Corporation is a global
leader in producing metal-matrix composite components used to
improve the reliability and performance of various electrical
systems. CPS products are used in motor controllers for hybrid and
electric vehicles, high-speed trains, subway cars and wind
turbines. They are also used as heatspreaders in internet switches,
routers and high-performance microprocessors. CPS also develops and
produces metal-matrix composite armor.
Safe Harbor Statements made in this document that
are not historical facts or which apply prospectively, including
those relating to 2020 financial results, are forward-looking
statements that involve risks and uncertainties. These
forward-looking statements are identified by the use of terms and
phrases such as "will," "intends," "believes," "expects," "plans,"
"anticipates" and similar expressions. Investors should not rely on
forward looking statements because they are subject to a variety of
risks and uncertainties and other factors that could cause actual
results to differ materially from the company's expectation.
Additional information concerning risk factors is contained from
time to time in the company's SEC filings, including its Annual
Report on Form 10-K and other periodic reports filed with the SEC.
Forward-looking statements contained in this press release speak
only as of the date of this release. Subsequent events or
circumstances occurring after such date may render these statements
incomplete or out of date. The company expressly disclaims any
obligation to update the information contained in this release.
CPS TECHNOLOGIES CORPORATION
Statements of Operations
(Unaudited)
|
|
Fiscal Quarters
Ended |
|
Nine Months
Ended |
|
|
September 26, |
|
September 28, |
|
September 26, |
|
September 28, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
------------ |
|
------------ |
|
------------ |
|
------------ |
Revenues: |
|
|
|
|
|
|
|
|
Product
sales |
$4,452,387 |
|
$4,387,125 |
|
$16,721,973 |
|
$16,023,615 |
|
|
------------ |
|
------------ |
|
------------ |
|
------------ |
|
Total
Revenues |
|
4,452,387 |
|
|
4,387,125 |
|
|
16,721,973 |
|
|
16,023,615 |
|
|
|
|
|
|
|
|
|
Cost of product sales |
|
3,514,813 |
|
|
4,164,187 |
|
|
13,050,860 |
|
|
14,466,266 |
|
|
------------ |
|
------------ |
|
------------ |
|
------------ |
|
Gross Margin |
|
937,574 |
|
|
222,938 |
|
|
3,671,113 |
|
|
1,557,349 |
|
|
|
|
|
|
|
|
|
Selling, general and |
|
|
|
|
|
|
|
|
administrative expense |
|
684,836 |
|
|
702,413 |
|
|
2,466,196 |
|
|
2,523,178 |
|
|
------------ |
|
------------ |
|
------------ |
|
------------ |
|
Operating income (loss) |
|
252,738 |
|
|
(479,475) |
|
|
1,204,915 |
|
|
(965,829) |
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
(21,263) |
|
|
(16,495) |
|
|
(87,004) |
|
|
(23,757) |
Other income |
|
(3) |
|
|
-- |
|
|
14,446 |
|
|
-- |
|
|
------------ |
|
------------ |
|
------------ |
|
------------ |
Net income (loss) before income |
|
|
|
|
|
|
|
|
tax expense |
|
231,472 |
|
|
(495,970) |
|
|
1,132,357 |
|
|
(989,586) |
|
|
------------ |
|
------------ |
|
------------ |
|
------------ |
|
Provision for income tax |
|
456 |
|
|
-- |
|
|
456 |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$231,016 |
|
$(495,970) |
|
$1,131,901 |
|
$(989,586) |
|
|
========= |
|
========= |
|
========= |
|
========= |
Net income (loss) per |
|
|
|
|
|
|
|
|
basic common share |
$0.02 |
|
$(0.04) |
|
$0.09 |
|
$(0.07) |
|
|
------------ |
|
------------ |
|
------------ |
|
------------ |
CPS TECHNOLOGIES CORPORATION
Balance Sheets (Unaudited)
|
|
September 26, |
|
December 28, |
|
|
|
2020 |
|
|
2019 |
ASSETS |
------------- |
|
------------- |
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$112,575 |
|
$133,965 |
|
Accounts
receivable-trade, net |
|
3,961,606 |
|
|
4,086,945 |
|
Inventories,
net |
|
4,187,272 |
|
|
3,099,824 |
|
Prepaid
expenses and other current assets |
|
139,963 |
|
|
147,786 |
|
|
------------- |
|
------------- |
|
Total current assets |
|
8,401,416 |
|
|
7,468,520 |
|
|
------------- |
|
------------- |
Property and equipment: |
|
|
|
|
Production
equipment |
|
10,282,980 |
|
|
9,649,169 |
|
Furniture
and office equipment |
|
508,423 |
|
|
508,423 |
|
Leasehold
improvements |
|
934,195 |
|
|
934,195 |
|
|
------------- |
|
------------- |
|
Total cost |
|
11,725,598 |
|
|
11,091,787 |
|
|
|
|
|
|
Accumulated
depreciation and amortization |
|
(10,478,053) |
|
|
(10,110,663) |
|
Construction
in progress |
|
127,408 |
|
|
255,754 |
|
|
------------- |
|
------------- |
|
Net property and equipment |
|
1,374,952 |
|
|
1,236,878 |
|
|
------------- |
|
------------- |
Right-of-use lease asset |
|
63,000 |
|
|
171,000 |
Deferred taxes, net |
|
147,873 |
|
|
147,873 |
|
|
------------- |
|
------------- |
|
Total
assets |
$9,987,241 |
|
$9,024,271 |
|
|
========= |
|
========= |
(continued)
CPS TECHNOLOGIES CORPORATION
Balance Sheets (Unaudited)
(concluded)
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS` |
September 26, |
|
December 28, |
|
EQUITY |
|
2020 |
|
|
2019 |
|
|
------------- |
|
------------- |
Current liabilities: |
|
|
|
|
Borrowings
against line of credit |
|
835,123 |
|
|
1,249,588 |
|
Note
payable, current portion |
|
37,917 |
|
|
-- |
|
Accounts
payable |
|
1,221,642 |
|
|
1,436,417 |
|
Accrued
expenses |
|
720,182 |
|
|
815,166 |
|
Deferred
revenue |
|
358,000 |
|
|
21,110 |
|
Lease
liability, current portion |
|
80,878 |
|
|
148,000 |
|
|
------------- |
|
------------- |
Total current liabilities |
|
3,253,742 |
|
|
3,670,281 |
|
|
------------- |
|
------------- |
Note payable less current portion |
|
149,652 |
|
|
-- |
Long term lease liability |
|
19,736 |
|
|
23,000 |
|
|
------------- |
|
------------- |
Total liabilities |
|
3,423,130 |
|
|
3,693,281 |
|
|
|
|
Commitments (note 4) |
|
|
|
|
|
|
|
Stockholders` equity: |
|
|
|
|
Common
stock, $0.01 par value, |
|
|
|
|
authorized 20,000,000 shares; |
|
|
|
|
issued 13,716,242 and 13,427,492, respectively; |
|
|
|
|
outstanding 13,296,168 and 13,207,436, respectively; |
|
|
|
|
at September 26, 2020 and December 28, 2019; |
|
137,162 |
|
|
134,275 |
|
Additional
paid-in capital |
|
36,633,553 |
|
|
36,094,201 |
|
Accumulated
deficit |
|
(29,248,532) |
|
|
(30,380,433) |
|
Less cost of
420,074 and 220,056 common shares |
|
|
|
|
repurchased, respectively; |
|
|
|
|
at September 26, 2020 and December 28, 2019 |
|
(958,072) |
|
|
(517,053) |
|
|
------------- |
|
------------- |
Total stockholders` equity |
|
6,564,111 |
|
|
5,330,990 |
|
|
------------- |
|
------------- |
Total liabilities and stockholders` |
|
|
|
|
equity |
$9,987,241 |
|
$9,024,271 |
|
|
========== |
|
========== |
See accompanying notes to financial
statements.
CPS Technologies Corporation
Chuck Griffith, Chief Financial
Officer
111 South Worcester Street Norton, MA 02766 Telephone: (508)
222-0614 Web Site: www.alsic.com
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